discharge by frustration Flashcards
Definition of frustration
when something unforeseen happens during the life of the contract beyond either parties control which makes full performance impossible or pointless or illegal
impossible to perform contract with one cases (can possibly be destruction of subject matter OR unavailability of subject matter/people OR personal incapacity so medical advice/illness)
impossible for the contract to be performed
- Taylor v Caldwell, contract to hire musical first series of concerts became frustrated and the building burnt down for the first concert
- Condor v the Baron Knights for personal incapacity
3 ways contract can be frustrated by
impossibility, illegality, pointlessness
illegal to perform the contract with one case
when a change in the law makes performance of contract illegal
-Fibrosa Spolka v Fairbaim, contract to supply machinery to a Polish company was frustrated when war broke out so it was a vehicle to ship cargo to a port occupied by the enemy
purpose of contract is destroyed by frustrating events with two cases, SO DESTRUCTION OF COMMON VENTURE
what a frustrating event occurs which makes the contract pointless
- Krell v Henry, main purpose of contract was destroyed
- Herne bay Steamboat v Hutton, could still take place so not frustrated
limits to using frustration
if one party has caused the frustrating event, the contract becomes less profitable, if the event is expressly provided for in the contract and when the frustrating event could have been foreseen
if one part has caused the frustrating event case
Maritime National Fish Ltd V Ocean Trawlers, they controlled the allocations of licenses
the contract has become less profitable case name
Davis Contractors Ltd v Fareham UDC, building contract claim to be frustrated when materials became more costly and it took longer but it was not frustrated as they were still capable of it being performed
when the frustrating event could have been foreseen case name
Amalgamated Investment v John Walker and Sons, old building was listed
remedies for frustrated contract from Law reform Act 1943
S1(2) Money already paid is recoverable; money due not payable
• Court can use discretion to order compensation for work done/expenses occurred before frustration of contract. Quantum meruit
S1 (3) Court may order compensation for valuable benefit one party might gain.
S2(3), if parties agree some of the solution this will prevail over the act
what law does the remedies come from
Law Reform (frustrated contacts) Act 1943
